In the current economic climate, start-ups and SMEs face a number of challenges. From establishing a viable home office and driving organic growth to coping with the incredible uncertainty created by Brexit, it is little wonder that business confidence has plummeted in recent times.
Beyond this, there are also challenges surrounding overheads and compliance with taxation laws. Take UK business rates, for example, which are a uniform Government tax on non-domestic properties as a contribution towards the maintenance of local services. Calculated based on your commercial property’s ‘rateable value’, based on an estimate by the Valuation Office Agency (VOA), it’s a significant cost to any business.
As the struggle that bricks and mortar businesses face with ever-smarter e-commerce competition, business rates are actually a heavy relic many landlords and investors are keen to minimise. Using an experienced business rates mitigation specialist such as GVA will offer clear guidance on the strategies best suited to your business as well as how to go about implementing them.
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In the meantime, however, here are some of the top successful schemes for reducing commercial property business rates: –
Empty Rates for Part Property Occupancy
Following the UK economic recession there are many vacant commercial properties and these are still being stung for business rates. Vacant commercial properties do, however, attract empty rates relief (Empty Property Relief), though only for three months (six months for industrial and warehousing).
Splitting occupation of a business to benefit from empty rate strategy can be a useful approach for businesses that are downsizing and thus occupying only some of a property where empty rates relief can be applied to the vacant portion of the property.
Landlords with vacant commercial properties can also offer a short-term lease (minimum six weeks) where the tenant becomes liable for business rates and when the tenant vacates another period of empty rates relief is available to minimise business rates. Some companies are set up to fulfil these short-term leases.
Occupation by a Charity
Another strategy for minimising business rates in vacant commercial properties is to seek occupation by a charity, which quality for relief from business rates. As little as posters in windows and Bluetooth broadcasting can be evidence of charity occupancy.
Small Business Rate Relief
Business rates make up a larger proportion of the turnover of a small business than they do more established commercial enterprises and so a small business rate relief, providing 100% exemption for properties with a ratable value of £6,000 or less is advisable.
Other strategies include challenging billing authority process and procedure and testing Valuation Office methodology.
Many UK businesses see business rates bills going up year-on-year yet their property value falling. And with the treasury collecting £20 billion annually from business rates, it’s unsurprising that landlords, tenants and investors are looking to reduce the sting.